Offerpad CEO Sees Commissions Falling as iBuyer Cuts Losses


Real estate technology firm Offerpad hosted its Q3 earnings call on Monday, Nov. 4—during which CEO Brian Blair fielded questions not just about his company’s own performance, but also about larger real estate industry trends.

Asked if he’s noticed changes to commission structures since the National Association of REALTORS®’ (NAR) settlement and rule changes, Blair said he had:

“Seeing as things have settled a little bit, (we’re) definitely starting to see some impact of commissions there from maybe even 50 basis points coming down on the buy side. And so a lot of direct conversations from agents asking what commission Offerpad pays. We’ve continued with buyer demand being low to keep commissions and obviously to partner with our agents to keep commissions with our original underwritten commissions, at least until the end of the year.”

That tracks closely with RISMedia’s independent analysis in a nationwide survey of agents and brokers conducted after the settlement changes went into effect.

Asked what he considered the “most resilient” statewide real estate markets, Blair answered “Midwest, the Carolinas and Atlanta,” but noted that recent devastation from Hurricane Helene makes it “hard” to judge the future for the previously stable Southern markets.

Offerpad’s quarterly results 

Quarterly revenue was down for Offerpad in Q3, falling from $251.1 million to $208.1 million. This continues the previous decline seen from Q1 to Q2. 

This was within expected parameters: projected revenue during their Q2 earnings report was between $185 million to $225 million. Offerpad’s Q3 revenue was also slightly higher than analysts’ projections ($204.6 million), per Yahoo! Finance.

However, EBITDA was substantially lower than analyst projections: down $6.18 million compared to projections of a decrease of $2.65 million. This is also a larger loss than the company experienced in Q2 ($4.4 million) but smaller than Q1 ($7.1 million). 

Offerpad, an iBuyer, acquired 422 homes in Q3 2024 (almost 50% less than in the previous quarter) and sold 615 (17% less than Q2). The company had expected to sell between 550 to 650 homes in Q3. 

The company continued to operate at a net loss in Q3, but a slightly smaller one than in Q2 ($13.5 million down from $13.8 million). 

This is attributable to a conscious effort to reduce costs; Offerpad’s operating expenses were down by 40% year-over-year this quarter. On the call, when asked about Offerpad’s increased annual cost savings, Blair explained: “We have taken the business down to lower levels. At the same time, we’ve worked through with process improvement initiatives and we’ve taken the opportunity to make sure that we’re not just running the business efficiently, but we’re doing it effectively as well.”

Blair most highlighted the positives during his remarks on the earnings call. 

“In the third quarter, we delivered revenue at the top of our guidance, driven by a healthy mix of our products, including our cash offer, our B2B Renovate business, our Direct Plus institutional buyer program and our Agent Partnership Program,” said Blair during his opening remarks. 

He continued to stress a theme of beating expectations: “This occurred in a quarter which the country continued to see residential resale transaction volumes at historic lows, persistent affordability issues, abnormal seasonality and the implementation of the most significant change in the industry commission practices in our lifetime.”

Offerpad’s projections for Q4 2024 have the theme of a controlled decline: $160 – $185 million in revenue, a “slightly lower” EBITDA and 480 – 540 homes sold. 

For the full Offerpad Q3 2024 earnings call, click here.





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